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Spartan Stores (SPTN - Free Report) came out with quarterly earnings of $0.50 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.54 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this grocery store operator and grocery distributor would post earnings of $0.57 per share when it actually produced earnings of $0.50, delivering a surprise of -12.28%.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

Spartan Stores, which belongs to the Zacks Food - Natural Foods Products industry, posted revenues of $1.89 billion for the quarter ended September 2018, missing the Zacks Consensus Estimate by 2%. This compares to year-ago revenues of $1.91 billion. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Spartan Stores shares have lost about 28.6% since the beginning of the year versus the S&P 500's gain of 3.1%.

What's Next for Spartan Stores?

While Spartan Stores has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Spartan Stores was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.44 on $1.96 billion in revenues for the coming quarter and $1.99 on $8.17 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food - Natural Foods Products is currently in the bottom 17% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +25.32% per year. These returns cover a period from January 1, 1988 through November 5, 2018. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.

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